Correlation Between Calvert Conservative and Sit Mid

Can any of the company-specific risk be diversified away by investing in both Calvert Conservative and Sit Mid at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Calvert Conservative and Sit Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calvert Conservative Allocation and Sit Mid Cap, you can compare the effects of market volatilities on Calvert Conservative and Sit Mid and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Calvert Conservative with a short position of Sit Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Conservative and Sit Mid.

Diversification Opportunities for Calvert Conservative and Sit Mid

0.16

Correlation Coefficient

Calvert Conservative  Sit Mid

Average diversification

The 3 months correlation between Calvert and Sit is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Conservative Allocatio and Sit Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mid Cap and Calvert Conservative is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Calvert Conservative Allocation are associated (or correlated) with Sit Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mid Cap has no effect on the direction of Calvert Conservative i.e., Calvert Conservative and Sit Mid go up and down completely randomly.

Pair Corralation between Calvert Conservative and Sit Mid

Assuming the 90 days horizon Calvert Conservative is expected to generate 11.03 times less return on investment than Sit Mid. But when comparing it to its historical volatility, Calvert Conservative Allocation is 2.92 times less risky than Sit Mid. It trades about 0.05 of its potential returns per unit of risk. Sit Mid Cap is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,308  in Sit Mid Cap on September 12, 2024 and sell it today you would earn a total of  239.00  from holding Sit Mid Cap or generate 10.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Calvert Conservative Allocatio  vs.  Sit Mid Cap

Calvert Conservative

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calvert Conservative Allocation are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Calvert Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sit Mid Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sit Mid Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Sit Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Calvert Conservative and Sit Mid

The main advantage of trading using opposite Calvert Conservative and Sit Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert Conservative position performs unexpectedly, Sit Mid can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sit Mid will offset losses from the drop in Sit Mid's long position.

The idea behind Calvert Conservative Allocation and Sit Mid Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.